Online debate: A European Perspective on Securitisation
On 10 February, the Florence School of Banking and Finance organised an online debate on the topic of securitisation. Securitisation is a technique that financial actors can use to create liquid instruments from a range of real economy-related illiquid products, allowing them, amongst others, to liberate regulatory capital on their balance sheets or to generate an alternative source of funding. Knowing the rules underpinning securitisation is crucial to understand the roles played by market participants and regulatory institutions, and how they can act to maximise their benefits and minimise their risks.
This online debate engaged with both the practical and regulatory dimensions of securitisation. In particular, the debate reviewed the key characteristics of the current regulatory frameworks for securitization in Europe. The event featured Bart Joosen, Professor of Financial Supervision Law at the VU University Amsterdam and founder of Regulatory Counsel Financial Services; Simon Broxham, Director of Duver Consulting with over 25 years’ experience in financial markets as a trader, structurer and managing director specialising in credit, securitisation and interest rate markets; and Richard Hopkin, Head of Fixed Income and a managing director in the Securitisation Division at the Association for Financial Markets in Europe (AFME).
In their presentation and in the following questions and answers sessions, speakers highlighted the historical evolution of securitisation, starting from the 2008 financial crisis and discussing then the revision of the rules undertaken in 2015-2019. They also discussed the need for transparent and simple rules to ensure financial stability on the one hand and the need to keep the regulatory burden sufficiently proportionate in order not to undermine market development on the other. Lastly, the also reviewed the current securitisation trends – both in the US and in Europe – on the basis of recent data and in the context of the European Capital Markets Union reboot.
The topic of securitisation will be discussed in details in a forthcoming online course on Securitisation: Regulation and Practice, which will have its pilot edition on 8-22 May.